Shares of Circle surged after lawmakers reached a compromise on the CLARITY Act, preserving stablecoin reward programs under certain conditions. The revised language allows usage-driven incentives tied to activities like trading, transactions, or staking, but restricts paying savings account-like interest on passive deposits.
Market Reaction
- Circle (CRCL) jumped 20%.
- Coinbase (COIN), main distributor of USDC, gained 7%.
- BitGo (BTGO) rose 10%, Galaxy Digital (GLXY) up 4%.
- Bitcoin climbed 2% to ~$80,000, its first time above that level since January.
What the Compromise Means
Earning yield on stablecoins like USDC has been a key user incentive. The new rules allow rewards tied to active usage, a relative win for Circle and Coinbase. However, smaller platforms relying on high-yield deposit products may face pressure. The shift aligns with the industry moving from return-seeking products to upgrading financial infrastructure.
Bank of America's Take
Analyst Ebrahim Poonawala called the resolution a net positive for banks, easing deposit flight concerns and reducing regulatory uncertainty, allowing banks to engage with digital assets on more controlled terms.
Industry Response
Coinbase CEO Brian Armstrong posted "Mark it up" on X, signaling strong support for the bill's progress.
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